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From restructuring to mergers and acquisitions, organisational change can be extremely tumultuous for companies and without a carefully mapped plan will lead to failure. Sarah O’Carroll goes behind the scenes of some companies that went through recent change to see how HR contributed to the success.

Change within business is
inevitable and in the current
uncertain economic climate
is around every corner.
Whether it is due to external
economic forces or internal commercial
motivations, every business goes through
multiple changes throughout its lifecycle.

But how change is managed and
planned, particularly from a people per
spective, will spell the difference between
those change strategies that fail and those
that are successful.

Numerous case studies have shown that
a poorly planned merger (or any type of
big organisational change) is synonymous
with failure. And, because of rapidly chang
ing economic conditions, many companies
have had to embark on huge organisational
shifts under a lot of pressure.

So it seems that having a “change pro
tocol” on hand for such situations would be
a safe idea for any company. A procedure
that is clearly mapped and can be pulled
off the shelf every time the company goes
through a merger, restructure, downsize or
re-engineering is a vital survival tool.

It is also the case that one of the great
est obstacles in any major restructure is the
people factor – resistance, redundancies,
retraining etc. Organisational restructures,
therefore, demand great things from human
resources departments

Lead from the very beginning

According to Penny Lovett, HR director of
Bupa Australia, (which won the award for
best HR strategy this year at the HR
Awards) clearly electing the leaders of
change from a very early stage of the
process is imperative to success. These peo
ple are the “change champions” and know
exactly where the business is going and can
help to guide and navigate the business
through uncertainty.

“We needed to provide quick certainty
about people’s roles and the direction of
our new business so that people could get
on with looking after our customers,” says
Lovett.

Bupa Australia, the third-largest health
care company in Australia, merged with MBF,
the second-largest healthcare company, in
January 2008. The merger affected a
workforce of 2300 and leading the
company through this change was
a big challenge, says Lovett.

In preparation for the
merge, Lovett looked to other
companies which had been
through such change to dis
cover any common policies
or pitfalls. One make or
break area was leadership.

“I cannot over-
emphasise the impor
tance of having those
key people in place from
an early stage,” says
Lovett.

Sydney Water is another
company which went
through significant organi
sational restructure in the last
18 months. The longer-term
goal for Sydney Water was, how
ever, a lasting behavioural change.

Up until they decided to make
changes, the company had three dif
ferent departments working together –
one which would make the decisions which
were then carried out by the other two. At
the time there were many unclear areas of
responsibility and the company found
that it wasn't using the skills of
all their people.

“We really had one group telling the other two groups
what to do and the relationships weren’t very healthy,”
says Eric De Rooy, general manager of the maintenance
division within Sydney Water. “So we decided we’d change
models to make it clearer in terms of who does what.
Instead of three units we had two divisions who would
work together to make sure we got the results for the com
pany.” In March 2008, the restructure commenced.

According to Peta Keaney, HR operations manager, the
HR team had developed a change management framework
which was in its infancy when the decision to change the
company’s operating model was taken and it was essentially
roadtested with this new restructure.

In the change management framework of Sydney Water, the
most significant development was a partnering program which
was very heavily resourced. It consisted of a partnering work
shop between the two executive teams of the two new divi
sions. They developed a partnering charter which they all
signed, committing to a certain way of working together.

Throughout this process, organisational behaviours
were closely linked to the programs and this was consis
tent through all levels of the organisation.

The change in Sydney Water did not lead to a major
downsizing. However, there were some people whose posi
tions were affected and the company used flexible policies
in dealing with positions that were made redundant.

“To make sure we retained talent for the organisation,
we applied selective voluntary redundancy guidelines to
make sure we retained the best people,” Keaney explains.

She says she could not over-emphasise the importance
of clearly defined goals and also the need for a defined
plan from the early stages.

“One of the key learnings for us was that it is really
important to establish a clear case for change very, very
early in the process,” says Keaney. “Some way into the
project we realised we had to make the massage clear as
to why we were changing and what the benefits were for
the organsiation and individuals.

“We developed a really innovative roadmap of where
we were going and why we were going there and we
coached all our managers so they could communicate that
story to the people. If we had done that earlier in the piece
we would have been even more successful.”

According to De Rooy, although there weren’t many
redundancies and few job changes, what the team tried to
do was to change the way employees worked, their per
formance and their behaviours. He says resistance was
one of the key challenges.

“One of the biggest challenges was to keep people
engaged, and find a better way to work and to work
together, rather than how they used to work,” he said. “A
lot of it is cultural change that we are still working on.”

Over-communicate

Any change, whether big or small, is often accompanied
by discomfort, uncertainty and resistance. In the experience
of both Bupa and Sydney Water communication played a
huge role in the successful implementation of change and,
according to Lovett, HR really cannot communicate and
inform employees of what is happening too much.

“Just when you feel you’ve communicated enough –
communicate some more,” she says.

The success of both Bupa’s merger and Sydney Water’s
restructure was measured through bottom-line results as
well as higher levels of staff engagement.

Sydney Water had three objectives, eight benefits and 22
KPIs which were involved in the change process and these
were measured every quarter. The results in terms of engage
ment levels demonstrated positive results of the program.

“There are early indicators from the last staff survey
that engagement in both divisions has gone up and that is
something we will measure again in June of next year,”
explains Keaney.

Middle-level managers were also surveyed after an inno
vative workshop and the results found that the majority
of respondents not only felt willing but also able to lead
the change.

“93 per cent said they were willing and able and even
88 per cent said they were getting excited about it,” says
Keaney.

Make it seamless for the customer

According to Lovett, the most significant reason for Bupa's
success was that the team was very clear strategically about
where it wanted to go. It also made a promise to customers
that the changes would make it easier for them to more eas
ily navigate what Lovett describes as a Austarlia's “rather
confusing health system”.

The key to delivering on this promise was to create sta
bility in the business very quickly while keeping the vision
and end goal in mind.

“We didn’t want to just merge two old businesses,” she
says. “We had a clear vision and goal and wanted to cre
ate a new vibrant business.”